Out of luck? The expansion of legalized gambling in the U.S. threatens the hundreds of Indian tribes that rely on casinos for their livelihood.

• Author: Williams, Timothy
• Position: NATIONAL

A generation ago, the Shakopee Mdewakanton tribe of Minnesota lived in beat-up trailer homes with no indoor plumbing. When wells froze over in the winter, tribe members took baths in melted snow. Three-quarters received government food assistance.

Today, the Shakopee are believed to be the richest tribe in American history: Each adult, according to court records, receives a monthly payment of about $84,000, or $1 million a year.

The financial success of the 480-member tribe--many of whose ancestors were hunted down, slaughtered, and eventually exiled from Minnesota 150 years ago--comes from the tribe's flourishing casino and resort operation. On weekends, it swells the population of the tiny reservation to the size of a small city.

"We have 99.2 percent unemployment," Stanley R. Crooks, the tribe's late chairman, once said. "[But] it's entirely voluntary."

560 Tribes, 310 Reservations

But while the Shakopee tribe continues to prosper, casino gambling, which has been one of the few economic bright spots on many Indian reservations, is now threatened by new competition: Many states looking for new sources of revenue have recently allowed non-Indian casinos to open or have taken steps to legalize online gambling.

"My worry is this may be the beginning of the end, that ... we are putting at risk the groups who continue to need Indian gaming," says Kathryn Rand of the Institute for the Study of Tribal Gaming Law & Policy at the University of North Dakota.

There are 560 federally recognized tribes in the U.S. and 310 Indian reservations. Most tribes had been devastatingly poor for decades, living without basic necessities like running water, electricity, or telephones. After some began using gambling to raise revenue, Congress legalized tribal casinos in 1988 with the Indian Gaming Regulatory Act.

Today, tribal gambling is a $28 billion industry. While most of the 230 or so tribes that operate casinos in 28 states have not become rich like the Shakopee, casinos have helped lift thousands of Indians out of poverty in the past 25 years.

A few casinos located near big cities--like Foxwoods in Connecticut, near Boston and New York City--have enjoyed enormous financial success. Reservations in remote areas, by contrast, haven't made large profits off casinos--or any other industry--mainly because they're so far from population centers. But casinos on even the most isolated reservations have still managed to employ dozens of tribal members and use...